Calkain & Chandan Economics Release NNN Report


Lofty risk-adjusted returns drove investors to well-tenanted net lease assets during the Great Recession. As the economic outlook and real estate markets have strengthened, the demand has remained robust even in the face of the Federal Reserve’s announcement in May 2013 that it would taper its quantitative easing measures. While real estate sales in March 2014 were 5.2% lower year-over-year, transaction volume in the first quarter of 2014 was up 15% over the first quarter of 2013.

Large sale-leaseback transactions have headlined the triple net market in the end of 2013 and first half of 2014. Other institutional investors have increased their exposure to net lease assets as well, seeking higher yields than fixed income securities with a similar risk profile. Recent CMBS transactions have also seen an uptick in single-tenant triple net collateral. More and more, the net lease sector is experiencing a secular shift toward becoming a significant component of general commercial real estate portfolios.


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